Build your own fortune for retirement

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You have the power to take full control of your retirement and get a head start in overcoming challenges of old age. Supplied
You have the power to take full control of your retirement and get a head start in overcoming challenges of old age. Supplied

Cambodia’s demographics are skewed heavily in favour of the young, with more than 60% of the population currently under the age of 30, according to the UN Population Fund. However, through improved living conditions and rapid economic growth over the previous two decades, the country is also experiencing a marked surge in its elderly population. And with this surge, new challenges are emerging, particularly as the number of people able to support their elders is expected to sharply decrease over the next decade or so.According to data from the National Institute of Statistics of Cambodia, life expectancy in the Kingdom has increased fast over the past 20 years. Back in 1998, women were expected to live to the age of 58, while men’s life expectancy was slightly lower at 54. Fast forward to 2013, and those figures increased to 71 for women and 67 for men – a respective of increase of 24% and 22%.

Traditionally, children and extended family members have borne the responsibility of looking after elders once they reach retirement age. But a Population Ageing in Cambodia report published in 2016 has cast serious doubt on the longevity of this practice by examining the Potential Support Ratio, which measures the number of working-age persons aged 15-64 per 100 people aged 65 and over.

In 1998, the support ratio was 15.5 persons. Last year, that figure had fallen to 12.5. By 2030, it is scheduled to fall even lower to 9.3 persons, a prediction that the report states will have “many policy ramifications” in the coming years.

With the family-support system shrinking by year by year, and the percentage of elderly people rising fast, current data predicts a future of more elderly people, with less young people able to financially support them. It therefore appears highly unlikely that young and middle-aged Cambodians today can expect their children to take care of them when they retire like has been the case in the past.

Cambodia’s government has already set out a plan to counter the effects of these rapidly changing demographics, titled the National Aging Policy, 2017-2030. In it, the government outlines a three-pronged approach, which aims to “eliminate age-based discrimination…to ensure gender equality by focussing more on women who form the majority of the older population and…to promote intergenerational relations so as to maintain the strength of the joint family system, a hallmark of Khmer culture.”

The best time to start a retirement plan is not when you already need one. Supplied

Along with help from the government, more and more Cambodians are taking control of their own futures by building a retirement fund, primarily by utilising the range of brand-new, highly specialised life-insurance solutions that were simply not available in years gone by.

AIA Cambodia in fact has shed a new light on its flagship life insurance product, AIA សម្រាប់ជីវិត (Samrab Chivit), to ensure every Cambodian has a workable and cost-effective way to build their fortune over the course of their working lives ready to enjoy in retirement.

AIA សម្រាប់ជីវិត now also provides 10 years of extended protection for free, which means customers only need to pay for 15 years to receive 25 years of protection plus a guaranteed 120% money back at the end of the term. It is specially arranged to allow people to pay for the 25-year coverage during the most productive years of their adult lives. Thus, they can be sure of retirement without having to worry about the premium payment and simply enjoy the time with the guaranteed return.

AIA management Pauline Teoh said she believes that the new proposition of AIA សម្រាប់ជីវិត plan truly reflects the current challenges faced by many Cambodians when planning for retirement, offering some much-needed peace of mind.

“With AIA សម្រាប់ជីវិត’s updated benefits, we believe every Cambodian now has the power to take full control of their retirement and get a head start in overcoming the challenges the future holds. We are confident that this new approach stands to benefit many Cambodians and aligns strongly with our staunch commitment to helping people live healthier, more fulfilling lives.”

It is just the matter of time before your retirement comes, so it’s best to prepare for it as early as you can – with the fortune you build for yourself – so that you don’t need to depend and hence place any burden on others, especially your loved ones.

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